Keeping employees is almost a full time job. It costs more to hire a new employee than to keep an old one. Studies show, it can cost up to 9 months of a salaried employee's salary to replace him. Between ads for job openings, recruitment fees, and training costs, the dollars start to add up. Business owners who understand what it takes to keep an employee will see a healthier bottom line than those who don’t.
Remember that although employee retention is more cost effective than turnover, sometimes you're going to lose someone due to relocation, changing industries, or just a better opportunity elsewhere. The time to act isn't when you are already receiving letters of resignation. Try these four tips for happier, more loyal employees:
Put the Right Person In the Right Position
Reducing employee turnover starts at the interview process. You're not just looking for someone who can do the job. You're looking for someone who can be happy doing the job. If you hire an employee who is unhappy, constantly looking for a new job, or putting in minimal effort, the odds of turnover are high. If your new employee has a clear understanding of what the job is like day in and day out, as well as a strong desire to be a part of the business, you're far more likely to get quality work out of them than if you just hire someone with nice credentials.
Reward Positive Behavior
The fastest way to make an employee feel less than valued is to ignore hard work and results. Workers who don't feel valued will leave much faster than those who do. Raises are a great way to show how much you value someone but you can't give raises everyday. Bonuses are also a possibility. Spring for lunch every now and again. Bring in cupcakes when your team has accomplished a milestone. Some rewards are free. Stopping by your employee's desk to praise them on a project is also effective. Or perhaps you can start an employee of the month program where you bestow special privileges to the employee who stands out each month.
You know your business better than anyone else, right? Wrong. Your employees often work on a level you're no longer familiar with. While you may see the big picture, they're the ones that speak to your customers more often or clean up after the day's over. You should solicit suggestions from your employees about ways to improve efficiency or cost savings.
Workers that feel they have the power to make their work environment better are more invested than those who don't. Even if the process is anonymous, it increases employee morale.
Put out a suggestions box or add an anonymous suggestion messaging option to the employee intranet. Be sure to check the suggestions and follow up on them. Each time you implement a change an employee suggested, you're showing the whole team how much you value your workers.
One of the top qualities of a long-term employee is loyalty to his company and/or his boss. When your employees think of you as more than the person that signs her paychecks, you have a better chance of keeping her.
Take the time to explain what makes you so passionate about your company and your industry. Plan employee outings where you can all just get to know each other. Company sports teams are good way to get to know each other. Hold annual family days so that the employees have a chance to socialize with each other and with you outside of work. But most of all, show empathy to your employees and they will show it back to you.